Monadelphous has lifted profits by 11 per cent following a busy pipeline of work throughout the year, but says an acute skilled labour shortage is constraining operations.
Monadelphous has lifted profits by 11 per cent following a busy pipeline of work throughout the year, but the engineering group says an acute skilled labour shortage is constraining operations.
The Victoria Park-based business delivered net profits after tax of $52.2 million for the 2022 financial year, an 11 per cent increase from $47 million in 2021.
That’s despite a slight drop in overall revenues, which were 1.2 per cent lower than last year at $1.93 billion.
The bulk of Monadelphous’ earnings (around $1.16 billion) were derived from its maintenance and industrial services division, which the group said had benefitted from increased demand from customers in resources and oil and gas.
Construction revenues of $774.4 million were 20.9 per cent lower than the prior corresponding period however, with the majority of its major construction projects completed during the first half of the year.
But Monadelphous managing director Rob Velletri was optimistic in terms of future opportunities in these areas, indicating there was no shortage of work.
“Demand for our maintenance services is expected to remain strong and resource developments in iron ore and oil and gas, as well as the significant pipeline of investment in battery metals and renewable energy, will provide a solid volume of construction prospects in the coming years,” he said.
Looking ahead, Monadelphous emphasised its concerns regarding labour shortages in the sector.
It said that difficulties in accessing skilled labour, largely driven by interstate border restrictions and a competitive market in general, have constrained capacity.
“A highly competitive labour market will remain the major challenge,” Mr Velletri said.
The company grew its workforce by around 2.4 per cent to 7,977 (including subcontractors) during the period, but has predicted tight labour conditions will continue.
“This extremely competitive labour market is predicted to continue in the foreseeable future,” the company said.
“With labour demands expected to increase further as a result of the large number of construction opportunities forecast for coming years, and the continued strong demand for maintenance services. “
Employee retention has therefore become a key area of focus for the business.
“The retention and attraction of highly capable employees aligned with the Monadelphous values will always remain a priority, particularly considering the high demand for talent across the industry,” it said.
Monadelphous shares responded positively to results, trading 6.64 per cent higher at $12.20.
